Kenya’s private sector contracted in March 2026 for the first time since August 2025, with the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) dropping to 47.7 from 50.4 in February. A reading below 50 indicates contraction in business activity, marking a notable shift in economic momentum.
The slowdown was linked to weaker consumer spending, tighter household budgets and reduced cash flow, pressures that have dampened demand for goods and services across industries. Geopolitical tensions, such as the war in the Middle East, have also compounded the strain by disrupting logistics and driving up transport and energy costs.
While the wholesale and retail trade segments exhibited some resilience, most sectors reported declines in output and new orders. Survey respondents reflected broad unease about future demand, signalling continued challenges ahead for businesses reliant on domestic and regional markets.
President William Ruto’s administration has been monitoring the fallout from global price volatility and supply disruptions. Officials said they were assessing measures to stabilise supplies and support key sectors, while the finance ministry maintained a positive overall growth forecast of about 5.3% in 2026, up from previous years.
Kenya’s private sector has also been affected by fuel shortages linked to the Middle East conflict, with about 20% of fuel outlets reporting supply issues as price freezes clash with higher global oil costs.
Discover more from LN247
Subscribe to get the latest posts sent to your email.
